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The political calculus of congestion pricing

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  • King, David
  • Manville, Michael
  • Shoup, Donald

Abstract

The political feasibility of using prices to mitigate congestion depends on who receives the toll revenue. We argue that congestion pricing on freeways will have the greatest chance of political success if the revenue is distributed to cities, and particularly to cities through which the freeways pass. In contrast to a number of previous proposals, we argue that cities are stronger claimants for the revenue than either individual drivers or regional authorities. We draw on theory from behavioral economics and political science to explain our proposal, and illustrate it with data from several metropolitan areas. In Los Angeles, where potential congestion toll revenues are estimated to be almost $5 billion a year, distributing toll revenues to cities with freeways could be politically effective and highly progressive.

Suggested Citation

  • King, David & Manville, Michael & Shoup, Donald, 2007. "The political calculus of congestion pricing," University of California Transportation Center, Working Papers qt9js9z8gz, University of California Transportation Center.
  • Handle: RePEc:cdl:uctcwp:qt9js9z8gz
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    References listed on IDEAS

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    1. Fiedling, Gordon J. & Klein, Daniel B., 1997. "Hot Lanes: Introducing Congestion-Pricing One Lane at a Time," University of California Transportation Center, Working Papers qt74n0z81q, University of California Transportation Center.
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    6. Deakin, Elizabeth & Harvey, Greig & Pozdena, Randall & Yarema, Geoffrey, 1996. "Transportation Pricing Strategies for California: An Assessment of Congestion, Emissions, Energy. And Equity Impacts," University of California Transportation Center, Working Papers qt723002kt, University of California Transportation Center.
    7. repec:ucp:bkecon:9781884829987 is not listed on IDEAS
    8. Eliasson, Jonas & Mattsson, Lars-Göran, 2006. "Equity effects of congestion pricing: Quantitative methodology and a case study for Stockholm," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(7), pages 602-620, August.
    9. Kockelman, Kara M. & Kalmanje, Sukumar, 2005. "Credit-based congestion pricing: a policy proposal and the public's response," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 671-690.
    10. Molly D. Castelazo & Thomas A. Garrett, 2004. "Light rail: boon or boondoggle?," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jul, pages 12-13.
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    Cited by:

    1. Vonk Noordegraaf, Diana & Annema, Jan Anne & van Wee, Bert, 2014. "Policy implementation lessons from six road pricing cases," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 172-191.
    2. Rouhani, Omid M. & Geddes, R. Richard & Gao, H. Oliver & Bel, Germà, 2016. "Social welfare analysis of investment public–private partnership approaches for transportation projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 88(C), pages 86-103.
    3. repec:eee:transa:v:107:y:2018:i:c:p:35-51 is not listed on IDEAS
    4. Hensher, David A. & Bliemer, Michiel C.J., 2014. "What type of road pricing scheme might appeal to politicians? Viewpoints on the challenge in gaining the citizen and public servant vote by staging reform," Transportation Research Part A: Policy and Practice, Elsevier, vol. 61(C), pages 227-237.
    5. Russo, Antonio, 2013. "Voting on road congestion policy," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 707-724.
    6. Börjesson, Maria & Kristoffersson, Ida, 2015. "The Gothenburg congestion charge. Effects, design and politics," Transportation Research Part A: Policy and Practice, Elsevier, vol. 75(C), pages 134-146.
    7. Börjesson , Maria & Kristoffersson, Ida, 2017. "The Swedish congestion charges: ten years on: - and effects of increasing charging levels," Working papers in Transport Economics 2017:2, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    8. David Hensher & Corinne Mulley, 2014. "Complementing distance based charges with discounted registration fees in the reform of road user charges: the impact for motorists and government revenue," Transportation, Springer, vol. 41(4), pages 697-715, July.
    9. Le Vine, Scott & Polak, John, 2016. "A novel peer-to-peer congestion pricing marketplace enabled by vehicle-automation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 483-494.
    10. Bruno Borger & Stef Proost, 2016. "The political economy of pricing and capacity decisions for congestible local public goods in a federal state," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 934-959, October.
    11. Paul J. Burke, 2014. "Green Pricing in the Asia Pacific: An Idea Whose Time Has Come?," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(3), pages 561-575, September.
    12. Zhi-Chun Li & Ya-Dong Wang & William Lam & Agachai Sumalee & Keechoo Choi, 2014. "Design of Sustainable Cordon Toll Pricing Schemes in a Monocentric City," Networks and Spatial Economics, Springer, vol. 14(2), pages 133-158, June.
    13. Grisolía, José M. & López, Francisco & Ortúzar, Juan de Dios, 2015. "Increasing the acceptability of a congestion charging scheme," Transport Policy, Elsevier, vol. 39(C), pages 37-47.
    14. De Borger, Bruno & Proost, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Economics of Transportation, Elsevier, vol. 1(1), pages 35-48.
    15. repec:eee:transa:v:105:y:2017:i:c:p:79-94 is not listed on IDEAS
    16. De Borger, Bruno & Proost, Stef, 2012. "A political economy model of road pricing," Journal of Urban Economics, Elsevier, vol. 71(1), pages 79-92.
    17. Mirabel, François & Reymond, Mathias, 2011. "Bottleneck congestion pricing and modal split: Redistribution of toll revenue," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 18-30, January.
    18. King, David A. & Gordon, Cameron E. & Peters, Jonathan R., 2014. "Does road pricing affect port freight activity: Recent evidence from the port of New York and New Jersey," Research in Transportation Economics, Elsevier, vol. 44(C), pages 2-11.
    19. Lisa Schweitzer & Brian Taylor, 2008. "Just pricing: the distributional effects of congestion pricing and sales taxes," Transportation, Springer, vol. 35(6), pages 797-812, November.
    20. David Hensher, 2013. "Exploring the relationship between perceived acceptability and referendum voting support for alternative road pricing schemes," Transportation, Springer, vol. 40(5), pages 935-959, September.
    21. Kono, Tatsuhito & Joshi, Kirti Kusum & Kato, Takeaki & Yokoi, Takahisa, 2012. "Optimal regulation on building size and city boundary: An effective second-best remedy for traffic congestion externality," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 619-630.
    22. Michael Manville & David King, 2013. "Credible commitment and congestion pricing," Transportation, Springer, vol. 40(2), pages 229-249, February.

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